Explanatory note

This Order designates descriptions of bodies corporate as suitable for investment and support or support by building societies under section 18 of the Building Societies Act 1986, so as to add “appropriate European life insurance vehicles” and “appropriate general insurance vehicles” as further types of designated body.

An appropriate European life insurance vehicle is a body corporate which is authorised or otherwise entitled, or is a candidate for authorisation (where applicable) to conduct business of any type specified in Schedule 1 to the Insurance Companies Act 1982 in any member State of the European Community or in any of the following countries: Austria, Denmark, Finland, Iceland, Liechtenstein, Sweden and Switzerland. An appropriate general insurance vehicle is a body corporate which is authorised or otherwise entitled, or is a candidate for authorisation to conduct business of any type specified in Part I of Schedule 2 to the Insurance Companies Act 1982 in any member State of the European Community or in any of the following countries: Austria, Denmark, Finland, Iceland, Liechtenstein, Sweden and Switzerland. A building society may not hold 15% or more of the equity share capital or corresponding membership right in an appropriate general insurance vehicle.

Investment is defined by section 18 of the Act as acquiring and holding shares or corresponding membership rights in and forming and taking part in forming bodies corporate. Support is defined by that section as provision of loans, grants and guarantees, services or property to bodies corporate. The Order enables building societies to invest in and support appropriate general insurance vehicles and European life insurance vehicles which have subordinate organisations; building societies may invest in and support or support European life insurance vehicles which do not have the capacity to have subordinate organisations.